The Central Bank of Ireland published a keynote speech by Governor Gabriel Makhlouf arguing that central bank independence is essential to delivering price stability and supporting long-term economic prosperity, but must be grounded in clear mandates and robust accountability. He said independence should be seen as an anchor that provides stability while allowing flexibility, enabling monetary policy decisions to follow economic rather than political cycles. Makhlouf emphasised that a central bank’s credibility is its most valuable asset and rests on more than institutional distance, citing competence, engagement, coherence and public trust in unbiased decision-making. He contrasted the 1960s and 1970s, when short-term political pressures contributed to persistently high inflation and weakly anchored expectations, with the post-pandemic period in which credible central banks could act decisively to return inflation to target while avoiding recession. He also argued that independence is not a “natural law” and must be continuously explained and earned through dialogue with society and other economic governance institutions, with legitimacy tied to delivering outcomes and being accountable for decisions.
Central Bank of Ireland 2026-02-18
Central Bank of Ireland Governor Makhlouf frames central bank independence as an anchor for price stability backed by accountability
Central Bank of Ireland Governor Gabriel Makhlouf stressed central bank independence's role in price stability and economic prosperity, based on clear mandates and accountability. He noted credibility, competence, and public trust are vital, contrasting past political pressures with credible central banks' decisive post-pandemic actions. Makhlouf argued independence must be continuously justified and earned through societal dialogue and accountability.